Thanks for the feed back Rob, jackbak, Edge7, wobbycarly, Kathryn, MIW, Lizzie, devank, warrabista, daniellee, orangestreet, Player, redwing and tvadera.
I learn so much from reading the interviews and look forward to reading more of them in the future.
I know that devank had a couple of questions - I'll answer them here. Please ask for clarification if need be.
Thank you Jingo for your story. Sounds like you came to this stage mainly through your 'savings' habit and a bit of timing.
Yes, that would be an accurate summary of our journey to date. Certainly nothing clever - just buy and hold and a few lucky buys at the right time. Savings have played an important part over the past couple of yrs as I am keen to get the portfolio to neutral asap!!
Given a choice I would like to live in a top floor... but what are your reasons for top floor(as a an investment)?
Good question. I'd have to say that I have read a lot of the material written by the 'Wakelins' who are well known buyers agents in Melbourne. While I don't agree with everything they write, I do acknowledge that they know the inner suburbs of Melbourne well and have developed a good understanding as to what appreciates in Melbourne. This was something they look for in flats.
Not to mention the added security, less noise (ie no one above you). The ones we own are positioned so that there is only one flat next door meaning less noise and greater privacy. One of ours has a nice view from the balcony over the trees into the garden below.
Having said all that - I wouldn't get too hung up on it! But I would say that having a carspot on title helps as they tend to rent more quickly. As an example, one of ours has just come up for rent and was re-rented on first inspection. Others in the block have been sitting empty for a long time - they don't have a carspace and a couple are on the ground floor. (Read into that what you will)....
How do you identify what tenants desire? It is very easy to think that our own desire is what 'normal'.
By this I mean buy what tenants desire according to the area you buy in. ie inner city - I'd buy places/houses with two bedrooms (eg they would be suitable for North Melbourne). But in Frankston, I'd buy a house with at least 3 bedrooms and 4 bedrooms are great because they are more scarce! (Meaning they tend to rent faster). Tenants in the inner areas value car spaces - tenants in outer areas garages/carports for their cars.
All our IP's are in Melbourne and all but one are in our own names - meaning we are well above the land tax threshold! The one in the company is in a separate entity and there is no land tax payable on this ip. There are of course other costs though which probably outweigh this benefit!! (Namely the annual asic auditing fee and accountant's fee for the tax return).
I like this advice. Is that ‘neutrally geared’ including –ve gearing?
Really depends on individual circumstances. Some people may not mind being neutrally geared after tax - others may prefer to be properly neutrally geared and not rely on tax benefits to support the portfolio. It would also depend on the stage of life that the investor is up to as well. (ie accumulation, stable job and -ve gearing would be fine - closer to winding down the job - prefer no -ve gearing at all!)
Would you use a portion of that buffer for a deposit?
It is possible to do so, but again it would depend on individual situations/risk profile etc. If my buffer only covered a year's worth of living and IP expenses, then I wouldn't be comfortable using it for a deposit on another IP - but that is just me.
Regards Jason.
